Opening Bell: China surprises with interest rate hike

The Opening Bell is our daily snapshot of the stock markets, including a wrap up of the must-read business stories for the day.

China surprised investors Tuesday by announcing an unexpected quarter-point increase in its benchmark interest rate, sending U.S. and Canadian stocks lower after the opening bell.

But although stocks sank on China’s move, which will likely help cool demand in that country, markets did see a handful of big deals Tuesday.

The biggest came from Texas Instruments, which announced it was paying US$6.5-billion to acquire chipmaker National Semiconductor Corp. Shares in the latter company were up 71% on the news. Price gains also hit Diamond Foods Inc. stock in morning trading, with shares climbing 10% after that company said it would buy the Pringles brand from Proctor & Gamble for US$1.5-billion.

Oil futures were slightly lower Tuesday as no significant developments or new unrest materialized. Prices for May contracts dropped US42¢, or 0.39%, to US$108.05. Gold was essentially flat in the morning, losing US30¢, or 0.02%, to US$1,432.70 an ounce.

Two pieces of economic news are also expected to be released later in the day. The Institute of Supply Management will put out its U.S. services-sector activity report at 10 a.m., while the Federal Open Market Committee will release its March 15 minutes of the meeting concerning the economy.

Here is a look at what the markets were doing just after the opening bell on Tuesday, April 5:

The Dow Joneslost 20.89 points, or 0.17%, to 12,379.14
The S&P 500lost 0.88 points, or 0.07%, to 1,331.99
The Nasdaqgained 2.75 points, or 0.10%, to 2,791.94
The S&P/TSX lost 23.42 points, or 0.16%, to 14,194.93

Here are the stories that will be impacting trading throughout the day:

Australia snubs exchange takeover

Australia plans to reject Singapore Exchange Ltd’s proposed $7.8 billion bid for Australia’s ASX Ltd on national interest grounds, underscoring the political challenges other major cross-border exchange deals, such as the TMX/LSE merger, are facing. http://natpo.st/goD1Yf

Oil may fall $20 if Libya tension eases: Schork

Oil may plunge by $20 a barrel if tensions ease in Libya and Middle Eastern countries, Stephen Schork, president of the Schork Group Inc., a consulting firm in Villanova, Pennsylvania, told Bloomberg Television’s “Inside Track.” http://natpo.st/hlSjKc

Bernanke takes aim at Clearinghouses

Regulators must step up oversight of clearinghouses now that derivatives markets are becoming increasingly reliant on them, Federal Reserve Chairman Ben Bernanke said on Monday. Bernanke focused on the risks posed by greater centralization of trades in the $600 trillion over-the-counter derivatives market, and argued that just because clearinghouses have fared well in past crises does not mean that they were any less of a threat to the financial system as a whole. http://natpo.st/hng1p9

Vale names new chief after government pressure

Brazilian mining giant Vale named a new chief executive under withering government pressure, a move that may spark fears of state meddling in Brazil’s private sector, but is not expected to dent investor confidence in the firm. http://natpo.st/fQRSLz

Diamond buys Pringles

Procter & Gamble Co said it will sell its Pringles potato chips business to Diamond Foods Inc for US$1.5 billion in stock, creating a new snack foods giant. Diamond, known for its Pop Secret popcorns and Kettle chips, will assume US$850 million of Pringles debt as part of the deal. http://natpo.st/ehsnDm

Nasdaq rebalance hits Apple

Exchange operator Nasdaq OMX Group will rebalance its benchmark Nasdaq 100 index, cutting the weighting of widely held stocks, such as Apple Inc, and causing volatility as investors adjust their portfolios. http://natpo.st/dSQjKe

Also, be sure to check out our in-depth overview of Canadian stocks to watch, analyst recommendations and other market advice: http://natpo.st/fe8drX

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